Aid effectiveness

Contents

The concept of aid effectiveness arose in the context of the adoption of the Millennium Development Goals (MDGs) at the United Nations in September2000 and the anticipated increase in the volume of Official Development Assistance (ODA) following the commitments made at the International Conference on Financing for Development in Monterrey (2002).

An initial international conference was held in Rome in February2003, instigated by the Organisation for Economic Co-operation and Development (OECD) and a group of donor countries. The final Rome Declaration, which brought together more than forty aid agencies and 28recipient countries, represented a mutual commitment to improve aid effectiveness, by implementing best practices in order to respect the priorities of recipient countries, simplify and harmonise procedures, and focus more heavily on results.

Paris Declaration (March2005)

The next significant step towards aid effectiveness was the conference held in Paris in March2005, which led to the definition of relatively precise commitments and a set of 12indicators that could be used to measure progress with regard to each commitment.

The Paris Declaration (PD) covers five main areas of work, which vary greatly in terms of scope and practical difficulty:

Alignment of donor intervention methods with the procedures of aid recipient countries: use of national systems and institutions (including procurement and financial reporting procedures, and the ultimate goal, which is to provide budget support.)

Consistency with national priorities and clearer definition of national aid policies by the recipient country (ownership)

Coordination and division of labour between donors: development of common procedures, division of labour between sectors and countries to avoid the problem of aid “darlings” (countries favoured by donors) and aid “orphans” (countries neglected).

Results-based management, in order to achieve precise outcomes, through a combination of aid and the ordinary budget of the aid recipient country.

Requirement to give a transparent account of aid use in donor and recipient countries.

French action plan for aid effectiveness

To implement the commitments made under the Paris Declaration, France drew up an action plan, which was approved by a Strategic Policy and Planning Conference held in December2006. This document states the commitments made by France in order to achieve the targets set by the Paris Declaration. In addition, it discusses the topics of division of labour and predictability in more detail. The plan covers three main areas, which are broken down into 12concrete measures:

Focus on capacity-buildingAlthough they do not feature heavily in the Paris Declaration, development and implementation of public policy are crucial contributors to aid effectiveness and must go hand in hand with capacity-building. The action plan is an opportunity to enhance French expertise in this field. It proposes the development of capacity-building activities within a coordinated framework, making use of local expertise whenever possible.

Enhancement of partnership framework papers (DCP)The partnership framework paper (DCP), which is the key reference for medium-term French aid planning, represents a tool for implementing many aspects of the Paris Declaration: division of labour with other donors, consistency with national policies, predictability of aid flows and results-based management.

Progressive development of this tool should enable the growth of partnership practices, based on the principle of mutual accountability.

The quantified annex of each DCP should thus become a tool for planning assistance and managing funding flows more effectively.

In broader terms, the action plan seeks to enhance several aspects of the management procedures and practices relating to provision of assistance.A major issue to be addressed is the ability of French stakeholders to participate fully in the processes of consultation and alignment. To achieve this, decision-making must be decentralised to enable stakeholders in the field to contribute effectively to the dialogue and the level of human resources in the field must be monitored. As regards predictability, in-depth discussions should lead to improved management of budget constraints.

European Union Code of Conduct on Complementarity and Division of Labour in Development Policy (May2007)The Code of Conduct adopted by the Council of the European Union in May2007 furthers the debate on aid complementarity and, above all, offers practical solutions to donors for the implementation of measures concerning the division of labour in the field of development assistance. The Code of Conduct offers EU Member States several significant improvements on the Paris Declaration.

Division of Labour

reduction of the number of priorities to three per country and per donor;
donors may opt for delegated cooperation or general budget support in non-priority sectors;
maximum of three to five countries per sector, with a lead donor who is given a clear mandate for coordination and discussion with the partner government;
replicate practices at regional level;
some areas not considered to be focal sectors: governance, research, higher education, etc.;
definition of comparative advantages for each donor as regards sectors and types of tool, and focus on these sectors;
reduction of number of target countries per donor country;
definition of medium-term allocation of funds and improved distribution to avoid some countries becoming “aid orphans”.

Affirmation of EU involvement

presence of at least one EU Member State in all developing countries and all major sectors;
universal competence of the European Commission: it has a duty to be present in all developing countries, but may delegate project implementation to Member States.

Fourth High Level Forum on Aid Effectiveness (Busan)

The Fourth High Level Forum on Aid Effectiveness was held in Busan (South Korea) in December2011. Building on the commitments that it made at the Paris Forum, France contributed actively to the preparations for this event; in particular, a senior official from the French Ministry of Foreign Affairs participated in the group that was responsible for negotiations. The French delegation (Ministry of Foreign Affairs, Ministry of the Economy and Finance and French Development Agency [AFD]) was led by the minister responsible for development cooperation, accompanied notably by two representatives of civil society.

The main goals of this Forum were as follows:

involve emerging countries (China, Brazil, India, non-members of the OECD) in discussions on aid effectiveness;
move from a conception of effectiveness focusing too heavily on management processes to one based on partner country development;
give new political momentum to these topics, which involve significant challenges, such as the untying of aid and the division of labour. The Forum culminated in the adoption of a final declaration: “Busan Partnership for Effective Development Co-operation”, which was endorsed by all of the Forum’s participants, including traditional donors and emerging countries. This final declaration established, for the first time, a framework founded on shared principles and differentiated commitments, which involved all of the development stakeholders (donors and recipients) and took into account the various funding procedures. By signing this declaration, emerging countries turned the principles of aid effectiveness into a benchmark for South-South cooperation, but on a voluntary basis. All of the development stakeholders strengthened and reiterated their commitments or announced new projects for effective cooperation and agreed to work together to achieve the Millennium Development Goals.

The Global Partnership mentioned in the final text was launched on 29June2012 in Paris; it deals with the implementation and follow-up of commitments for effective development, replacing the OECD Working Party on Aid Effectiveness.

The Global Partnership for Effective Development Co-operation is co-chaired by a troika of ministers (from a traditional donor country, a recipient country and an emerging country); administrative support is provided by a joint OECD/UNDP team. Every 18-24months, it brings together the ministers of the States that have adopted the Busan Declaration, senior members of international organisations, representatives of civil society, members of parliament and private sector representatives to ensure that the commitments are being implemented.

Implementation of the Busan Declaration should underpin the future work of the French Government, which, alongside the other signatories, has made the following commitments:

enhance aid transparency, through the adoption of a new common standard for the publication of detailed information on development assistance by2015, based on the work of the OECD and the International Aid Transparency Initiative;

improve predictability of aid flows, by introducing the reforms needed for the regular publication of data on future development assistance expenditure;

make better use of national systems of partner countries and help to strengthen them;

accelerate efforts to untie aid for the least developed countries;

reduce aid fragmentation and limit the proliferation of multilateral channels;

use transparent results frameworks, in line with the goals of partner countries.